Crude Oil Price in the 2016 state budget will decline by 45.0 %

The Ministry of Finance of Azerbaijan has started drafting State Budget 2016. The Ministry has reported that with taking into account events at the world energy market, in particular declining trends in oil prices, the State Budget oil price will be set at the level of $50 US per barrel.

The price of crude oil in 2016 state budget will be decreased by 45.0 % since it is $ 90 US per barrel this year’s budget.
The ministry has also reported that the fall in oil prices at the world market, of course, affected the budget revenues. The impact tells mainly on profitable part of the consolidated budget. Against the background of those events, the government made a decision to reduce some of investment expenditures, which are not necessary, and extend the implementation of some projects by another year. Some infrastructure projects and projects of construction of roads, water and sewer services will be postponed and extended.

CESD calculations confirms that 2016 state budget revenue will be lower this year’s public income. Non-oil sector’s contribution to 2016 state budget is drafted almost the same with the 2015 projection. In this case, non-oil sector will contribute around 35.0 % of total budget revenue. Due to low oil price in the 2016 state budget, public revenues are expected to be around 18.0 billion manat.

Based on the Ministry of Finance reports, CESD underline that this year’s state budget will not be amended although the price 35.0 % lower than projected in the budget. Ministry of Finance is planning to cut some expenditures particularly state investment expenses planned for 2015.